Dubai allocates 5% of annual budget to empower entrepreneurs

The government of Dubai allocates five percent of its annual budget for the development of young entrepreneurs, the director of finance at Dubai Small and Medium Enterprises (SME) said on Thursday.

"We started 12 years ago and several UAE nationals had good business ideas but were hesitant to set up the business," Fareed Karmostaji, director of finance at the Mohammed bin Rashid Establishment for SME Development said at the 14th Jeddah Economic Forum.

"So we launched an initiative defining the legal framework for those to operate their new business from home initially then take it to the wider market after three years," he added.

He explained that licensing fees for new startups in the emirate are waived for the first three years, while the required financing is completed within a month.

The development organization also works closely with schools to encourage young entrepreneurs to pursue their business ideas and offer them the opportunity to test the experience of setting up their own businesses.

"Mohammed bin Rashid Establishment for SME Development has set a curriculum for leadership among schools students in addition to launching several initiatives such as 'the young entrepreneur' which aims at teaching business leadership principles to the youth by providing them with small projects at shopping malls,” Karmostaji said.

Dubai SME works closely with Dubai’s government, land owners and individual owners to provide preferential rates to entrepreneurs, as well as offering a priority in leasing with a 20 to 30 percent reduction on rates.

In regards of financing the businesses, Karmostaji explained that new enterprises in the small and very small category can benefit from funding between 5,000 and 250,000 dirhams, which would be settled over the course of seven years.

Financing for established businesses range between 250,000 and 3 million dirhams.